Bernard Durkan (Kildare North, Fine Gael)
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270. To ask the Minister for Finance the reason home borrowers in the market here are required to pay higher interest rates than those prevailing throughout the European Union; if the rules of the Single Market apply in these circumstances; and if he will make a statement on the matter. [10431/17]

Bernard Durkan (Kildare North, Fine Gael)
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271. To ask the Minister for Finance the extent to which home borrowers can avail of mortgage facilities at a comparable rate of interest to that available to home borrowers throughout the EU; and if he will make a statement on the matter. [10432/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 270 and 271 together.

The issue of standard variable mortgage rates is a significant one for this Government and it has made it clear that it is not acceptable for lenders to charge excessive rates on such mortgages. The Programme for a Partnership Government, therefore, sets out a number of important and practical measures which can be taken to improve the position of variable rate mortgage holders.

Although Ireland is in a monetary union with other Euro area Member States, it has to be acknowledged that there are many factors, such as differences in national legal and housing systems, cultural preferences, language, the proximity of lenders to borrowers, which will continue to inhibit the full integration of the residential mortgage market and of mortgage interest rates in the Euro area and the wider EU. More directly, differences in the nature of mortgage and other credit markets, credit and market conditions, mortgage default rates and the funding of mortgage credit will also impact on the levels of mortgage lending rates between and within different countries.

However, there have been some developments which seek to promote a more harmonised market for credit across the EU. In particular, the 2014 Mortgage Credit Directive, which has now been transposed into Irish law by the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, seeks to develop a more harmonised, efficient and competitive internal market for the provision of residential mortgages to consumer borrowers and this should help to promote the closer integration of EU mortgage markets over time.

In terms of the national context, this Government is committed to reducing the cost of secured mortgage lending. 

Firstly, it wishes to promote competition in the supply of mortgage finance. To that end, the Competition and Consumer Protection Commission (CCPC) will work with the Central Bank to set out options for Government in terms of market structure, legislation and regulation to lower the cost of secured mortgage lending and to improve the degree of competition and consumer protection.  

In liaison with the Central Bank, the CCPC has now commenced this work and last week announced a public consultation to gather views about the future of the Irish mortgage market. The closing date for submissions is 20 March 2017. The CCPC will produce a final report outlining their proposals by the end of May 2017.

In overall terms, the Government is of the opinion that increased competition is the best way to ensure that retail lending rates are driven down in a sustainable way for the market as a whole but without giving rise to potentially undesirable consequences for the provision of new mortgage lending. This is a policy area that the Government will keep under active review in its ongoing engagement with mortgage lenders and in implementing the Programme for Government commitments to help deliver on a long term basis better outcomes for all mortgage borrowers.